The company, headed by Richard Barrett and Johnny Ronan, intends to use £15m (€16.7m) from the proceeds to buy back some of its shares. Yesterday the CREO share price rose 5.85pc to £3.44 after the announcement.

The deal, involving the sale of a 50pc interest in the Tangdao Bay joint venture development to its partner in the project, SIIC Shanghai Holdings Company, represented a 10.9pc premium to the most recent independent valuation for the stake in June 2009.

No borrowings need to be repaid from the sale proceeds and, as CREO's loan to value ratio was a respectable 36pc last June, it is in a comfortable position to undertake the share buy-back. The buy-back is designed to further boost CREO's net asset value, which was calculated at £10.62 per share in June 2009. The £15m share buy-back would account for about 8.8pc of the current market capitalisation of £170m.

The sale will also enable CREO to drop its plan to issue nil dividend preference shares, which it previously announced as its method to mop up some equity.

Last June CREO also sold its interest in the City Centre 5 development at an 8.9pc premium to the independent valuation of December 31, 2008.

It is still involved in five other major projects in the Shanghai area.

The company said it was continuing to work with its advisers to generate third-party demand for its shares.

CREO chairman Ray Horney said: "This transaction reinforces the company's strategy of focussing on its core investment and development assets, particularly in Shanghai, and will further strengthen the company's cash position and provide a strong platform for the company to move forward."